Buying a Bank Owned Home Takes Preparation & Patience

Buying a Bank Owned Home Takes Preparation & Patience

Realtor Magazine reported that the rise in foreclosed homes had also brought about an increased desire for such homes, not only purely as an investment vehicle, but also as a primary residence.

If you have been considering purchasing a bank owned home, make sure your eyes are wide open. With opportunity comes issues. However, if you are prepared, you will be able to avoid issues or know how to address them with minimal effort and stress. Here are some tips to keep in mind:

  1. Get the facts: Before jumping into purchasing a bank owned home, you need to know what you are doing, and that means doing your research in a number of areas. First, you need to get a list of comparable sales so that you know if yobank-owned-homeu can afford the property, to ensure your offer is reasonable, and to help you when competing against multiple offers. Also, you may be able to find out which bank owns a certain property, and contact a manager about it to get as much information as possible.
    Next, you can ask a buyer’s agent to access the amount of the loan that is outstanding and can compare that to the amount that the bank is asking, which will help you determine an offer amount. Finally, take a look at the property’s history in case it contains anything, such as a long vacancy, that may dissuade you from making an offer. In essence, find out everything you can about a home before diving in.
  2. Qualified and approved: As with any home purchase, getting pre-approved for a mortgage is the best way to go. Not only does it let you know what a mortgage lender will lend to you, but it will also speed up the home buying process. Note that some mortgage lenders may charge an upfront fee when checking your credit while others may simply add it to the bottom line.
  3. Sweeten the deal: When there are multiple offers on a home, which one will the seller choose? The best one of course! Therefore, when creating your offer, incorporate aspects that will improve your offer and show that you are serious. It doesn’t have to be a higher offer either. For example, you can shorten the inspection, contingency, or escrow period on the home, or else offer a larger down payment.
  4. Know the listing agent: Looking to purchase any home can be difficult for non-real estate professionals, and purchasing a bank owned home comes with its own complexities. Making an offer with the property’s listing agent can ensure that your offer makes it to the mortgage lender. As well, the listing agent will have the knowledge to negotiate the entire experience of the bank owned property process. Finally, many mortgage lenders prefer to work with a specific group of trusted real estate agents, so establishing a relationship with these listing agents could mean that you access new listings as soon as they come on the market.
  5. Contact a buyer’s real estate agent: Despite their knowledge, the listing agent can only do so much for you. So what do you do when you have questions that are beyond the domain of the listing agent? You should contact a buyer’s real estate agent. They can answer any questions you have and streamline the process to avoid issues from popping up.
  6. Patience!: This can be hardest part of all – being patient. But it is equally as important. Being impatient can cause you to offer more money than you should or remove contingencies in your offer that should remain. Also, sometimes you can get a better deal on a property simply by being patient. Keep in mind that buying a bank owned home may have a longer timetable than a regular home purchase, and expect that mortgage lenders will counter offer. But good things will come to those who wait.

You can definitely get a good deal on a bank owned home in the current market – as long as you put in the time, effort, and research. Make sure your finances are healthy, get pre-approved and a bank owned home could end up being your dream home.

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